In with the new, out with the old: 10 new habits for highly effective skinflints

Have Jamaicans been developing new skills in managing their money since the recession has reduced their ability to earn and sped?

Audio Hoo, regional business manager at COK Sodality Credit Union, says that from her experience, the main things consumers have been spending less money on since the financial crisis hit in September 2008 are:

Food and groceries - switching instead to less costly brands or locally made products.

Clothing.

Beauty care.

Entertainment - not going out as often, and finding less-expensive ways to relax.

Non-essentials - car wash, landscaping, etc.

"Many persons have been relying on their savings to tide them through this difficult time period," said Hoo.

"This is especially common for persons who were made redundant or have had their work hours cut."

But those without savings or a 'back-up plan' have been feeling the hard times most of all. Because they did not save, they have had nowhere to access funds to offset their monthly expenses, such as rent, utilities, food, which usually remain the same whether or not there is an income stream.

The crisis has brought home to them the importance of having some form of financial cushion.

They have also learnt, Hoo stated, to effectively budget.

"Persons now have to identify their 'needs' and separate them from their 'wants'.

This has now become quite common as persons are working with smaller incomes and thus a tighter budget, and as such, are forced to prioritise their expenses and or needs."

As the old year heads through the door, Sunday Business conducted an informal survey to see what new habits Jamaican consumers developed as they responded to the pressures of the last 12 months.

8 Old: Keeping open house and cooking generously for hungry friends. New: Offering a cool drink to guests who drop by.

9 Old: Having one cellular phone with one post-paid plan.New: Switching to pre-paid, looking for deals across the three big networks to take advantage of freebies offered by each.

10Old: Avoiding store sales and the crowds they attract.New: Bargain hunting is the new hip habit.

Approximately 40,000 Jamaicans have lost their jobs in the current recession, others have taken pay cuts, and some have had wages frozen.

A new tax package goes into effect today that once fully implemented, will increases the cost of commute, food, and utilities.

Consequently, disposable income is scarce and consumers are more inclined to spend on necessities.

But, are Jamaicans likely to take these behaviours into more prosperous times, or are they likely to go back to spending more once the economy finds its footing and income begins to rise again?

According to Hoo, it is highly likely that many will snap back to old habits when times are good.

"Usually, as income increases, so does expenditure, and as such, it would not be surprising that a few persons would revert to former behaviour," she said.

Still, in the here and now, and certainly in the early part of 2010, Jamaicans, she says, will continue to prioritise on spending, and some may start saving more, even when the economy recovers, just in case of a 'double-dip', and the recession comes roaring back.